Investment Rating - Trading Sell [2][14][30] Core Insights - The company experienced a sales drop of 12% YoY in 1HFY24, primarily due to a decrease in average selling price (ASP) by 12.9% in HKD terms, although sales volume remained resilient at approximately 19 million pieces, reflecting a 1.7% YoY increase [1][10] - Management anticipates a better performance in 2HFY24, driven by fast orders from Japanese clients, with an expected sales volume growth in FY24E at mid-single digits YoY, a revision from previous guidance of a mid-single digit drop [1][12] - The net gearing ratio improved significantly, declining to approximately 3.0% in 1HFY24 from 13.0% in FY23, allowing the company to raise its payout ratio to 75% in 1HFY24 [11][12] Financial Performance - The company's core net profit for FY24E is projected to reach HK$350 million, supported by volume growth and gross profit margin (GPM) expansion due to lower production costs [4] - The company is currently trading at a FY24E PE valuation of 4.7x, which is about a 54% discount compared to its HK-listed textile peers [4] - The target price for the company is set at HK$0.87, indicating a potential upside of 21.1% from the current price of HK$0.72 [14] Operational Developments - The company is expanding its production capacity in Vietnam to reduce lead times and meet client demand, with expectations that Vietnam will account for approximately two-thirds of its total knitwear capacity [12][13] - The largest customer, Uniqlo, accounted for about 48% of the company's revenue in 1HFY24, and as apparel retailers begin to restock, sales are expected to increase significantly in 2HFY24 [12][13] Market Position - Nameson is recognized as one of the leading knitwear manufacturers in China, providing a comprehensive range of services from raw material development to timely delivery [2][10] - The company has diversified its clientele, supplying to internationally renowned brands such as UNIQLO, Tommy Hilfiger, Under Armour, and Lululemon [2][10]

M N 8 May 2024 CMB International Global Markets | Equity Research | Company Update Walt Disney Co (DIS US) Looking beyond 3Q OI volatility Target Price US$142.00 Disney delivered solid 2QFY24 results, with inline revenue (+1.2% YoY) (Previous TP US$142.00) and upbeat profit (+30% YoY, beating consensus by 8%). The upbeat Up/Downside 34.7% margin was mainly attributable to DTC’s breakeven (ahead of guidance). Current Price US$105.39 Mgmt also raised its FY24E EPS growth target to 25% YoY (vs. prior at least ...

Investment Rating - The report maintains a "BUY" rating for TK Group (Holdings) Limited with a target price of HK$2.44, indicating an upside potential of 28.5% from the current price of HK$1.90 [6][8]. Core Insights - The company is expected to recover in FY24E, supported by a strong balance sheet and operational efficiency improvements. Despite a decline in FY23 revenue and net profit due to weak downstream demand, the blended gross margin increased to 26.4%, the highest since FY20, driven by significant improvements in the mold fabrication segment [6][8]. - The financial position remains robust, with net operating cash inflow up 20% YoY to HK$445 million in FY23 and a net cash position of approximately HK$1.1 billion, which is about 72% of the market cap [6][9]. Revenue and Profit Forecast - Revenue is projected to grow at a CAGR of 12.5% from FY23 to FY26E, with net profit expected to grow at 18.5% CAGR during the same period. The FY24E PE ratio is estimated at 6.1x, which is considered undemanding compared to historical averages and peers [8][9]. - The order book for FY23 was HK$830 million, primarily driven by automotive and healthcare sectors, which accounted for 46% of the total order book. The order book is expected to increase to approximately HK$1 billion by April [6][8]. Segment Performance - The mold fabrication segment's revenue is expected to grow from HK$620 million in FY23A to HK$718 million by FY26E, with a gross margin projected to remain above 30% [3][6]. - The plastic components manufacturing segment is forecasted to recover from a revenue drop in FY23A to HK$2,060 million by FY26E, with gross margins expected to stabilize in the mid-20s percentage range [3][6]. Dividend Policy - The company raised its dividend payout ratio to 80% in FY23, supported by low CAPEX and strong cash flow. The expected payout ratio for FY24E is projected to remain above 50%, translating into dividend yields of 10.8% and 13.6% for FY23 and FY24E, respectively [9][6]. Market Position and Client Diversification - TK Group continues to diversify its client portfolio, successfully engaging with leading global brands in various sectors, including automotive and healthcare. The company is optimistic about the growth potential in electronic atomizers, which are increasingly used in both e-cigarettes and medical devices [6][8].

M N 7 May 2024 CMB International Global Markets | Equity Research | Company Update PICC P&C (2328 HK) 1Q24 catastrophe-induced claims fully released; FY24 CoR guidance sustained; exp. >40% payout PICC P&C reported weaker-than-expected first-quarter results given the 1Q24 CoR Target Price HK$11.90 slightly increased to 97.9% (vs: FY23: 97.8%) and auto/non-auto premium growth Up/Downside 25.9% dropped to +1.9%/+5.0% YoY (1Q23: +6.5%/+12.8% YoY). Dragged by increased Current Price HK$9.45 claims for low-temper ...

Disclosures & Disclaimers Analyst Certification The research analyst who is primary responsible for the content of this research report, in whole or in part, certifies that with respect to the securities or issuer that the analyst covered in this report: (1) all of the views expressed accurately reflect his or her personal views about the subject securities or issuer; and (2) no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific views expressed by that analy ...

Investment Rating - The report maintains a "BUY" rating for BYD Electronic with a target price of HKD 41.35, indicating an upside potential of +54.3% from the current price of HKD 27.10 [2][10]. Core Insights - BYD Electronic's 1Q24 results were in line with expectations, showing revenue growth of 38.5% year-on-year to RMB 36.5 billion and net profit growth of 33% to RMB 610 million, primarily driven by the consolidation of Jabil Singapore [2][3]. - The company is expected to benefit from increased project wins from US clients following the acquisition of Jabil, which positions BYD Electronic as a strategic partner for flagship projects [2][3]. - The generative AI smartphone market is anticipated to drive a new replacement cycle, with shipments expected to grow significantly from 4% in 2023 to 8% in 2024, potentially reaching 522 million units by 2027 [4]. Financial Performance - BYD Electronic's assembly service revenue grew by 23% year-on-year in FY23, while components revenue saw a decline of approximately 4% year-on-year [3]. - The automotive intelligent segment revenue surged by 52% year-on-year to RMB 14.1 billion in FY23, reflecting strong demand for electrification and intelligent systems [7]. - The IoT and automotive segments are projected to achieve over 20% growth in the next 2-3 years, with revenue expected to reach approximately RMB 40 billion to RMB 50 billion in FY24E-25E [7][9]. Earnings Forecast - The report has adjusted BYD Electronic's FY24E and FY25E earnings forecasts, projecting a revenue growth of 25.8% and a net profit growth of 20.0% CAGR from FY23 to FY26E [9][11]. - The company is expected to maintain a gross margin of around 8.0% to 9.0% in the coming years, supported by improved product mix and operational efficiencies [9][11]. Market Position and Strategy - BYD Electronic is diversifying its business away from smartphone-related activities, focusing on IoT and automotive segments as key growth drivers [9][10]. - The company has established a strategic partnership with NVIDIA, which will enhance its capabilities in AI products, including customized servers for internet customers [6][9].

Investment Rating - The report maintains a "BUY" rating for the company, with a new target price of HK$24.80, implying a 37.8% upside from the current price of HK$18.00 [4][6]. Core Insights - The company experienced a positive VNB growth of +30.7% YoY in 1Q24, outperforming peers such as China Life and Ping An [2]. - The net profit attributable to shareholders grew by +1.1% YoY to RMB 11.8 billion in 1Q24, marking a turnaround after three consecutive quarters of decline [2][9]. - The insurer's life underwriting focus has shifted back to agency distribution, with agency FYP increasing by +31.3% YoY [2][10]. - The bancassurance channel faced challenges, with FYP declining by -21.8% YoY, although this was an improvement from a -54.6% decline in the previous quarter [2][11]. - The report highlights the potential for margin expansion due to the ongoing Changhang Transformation initiated in 2022 [2][6]. Summary by Sections Financial Performance - The company's net profit for FY23 was RMB 27.9 billion, with an expected increase to RMB 32.2 billion in FY24 [3]. - The EPS is projected to rise from RMB 2.83 in FY23 to RMB 3.30 in FY24 [3][15]. - The company reported a total insurance revenue of RMB 266.2 billion in FY23, with an expected increase to RMB 281.6 billion in FY24 [14]. Valuation Metrics - The stock is currently trading at 0.29x FY24E P/EV and 0.61x FY24E P/BV, with the new target price implying 0.40x FY24E P/EV and 0.84x FY24E P/BV [6][7]. - The report indicates a conglomerate discount of 10% applied to the valuation [5]. Operational Metrics - The company's first-year premiums (FYP) for 1Q24 were RMB 32.8 billion, a slight increase of +0.4% YoY [2][11]. - The agency channel's FYRP and FYSP grew by +25.4% and +44.5% YoY, respectively, indicating a strong recovery in agency productivity [2][10]. - The combined ratio for P&C insurance improved slightly to 98.0% in 1Q24 from 98.4% in 1Q23 [12]. Investment Performance - The net investment results showed a decline of -26.1% YoY, primarily due to a drop in net interest income and a shift from a gain to a loss in investment income [2][9]. - The total investment assets increased by 4.2% YoY to RMB 2,344.8 billion [13]. Solvency Ratios - The core solvency ratio for CPIC Life was reported at 107.9% in 1Q24, down from 117.0% in 4Q23 [11]. - The comprehensive solvency ratio was 195.8% in 1Q24, reflecting a decrease from 209.8% in the previous quarter [11].

M N 2 May 2024 CMB International Global Markets | Equity Research | Company Update Henlius Biotech (2696 HK) Strong product sales in 1Q  Strong sales maintained in 1Q24. Henlius Biotech (Henlius) recorded total Target Price HK$20.33 revenue of RMB1.349bn in 1Q24, up 35% YoY. Of this, HANQUYOU’s sales in (Previous TP HK$18.67) China was RMB671mn (+25% YoY, -4% QoQ), which accounted for 23% of our Up/Downside 21.2% previous FY24 estimate. In 1Q24, serplulimab (PD-1) experienced robust Current Price HK$16.78 ...

M N 2 May 2024 CMB International Global Markets | Equity Research | Company Update Yum China (9987 HK) 2Q24E is tough but turnaround is still possible o The 1Q24 results of Yum China were satisfactory, however the catering industry Target Price HK$348.13 remain subdued and hence we have become more cautious about YUMC’s (Previous TP HK$384.17) 2Q24E outlook. But since the turnaround in 2H24E should still be intact, plus Up/Downside 18.3% the massive buyback and dividend payment, we continue to maintain BUY. ...

M N 2 May 2024 CMB International Global Markets | Equity Research | Company Update Joinn Laboratories (6127 HK) Waiting longer for recovery to materialize Target Price HK$10.36 Joinn reported 1Q24 revenue of RMB325mn, down 12.1% YoY, and booked (Previous TP HK$14.41) attributable net loss of RMB272mn, a significant downturn from an attributable Up/Downside 24.6% net profit of RMB188mn in 1Q23. The 1Q24 revenue accounted for 13.4% of Current Price HK$8.31 our full-year estimate, in line with its historical a ...